To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

Tuesday, January 11, 2005

Vulgar Libertarianism Watch, Part 1

Since I first considered doing a blog, I've envisioned a recurring feature called "Vulgar Libertarianism Watch," or some such. At one point, I toyed with the idea of making that the name of the blog, and devoting most of my effort to reporting on the kind of faux "free market" analysis that consists of an apologetic for big business. But although there would be more than enough such material to keep me blogging indefinitely, I decided such an exclusive focus would be too much of a one-trick pony.

So I've decided to go with the original impulse, and regularly feature "Vulgar Libertarianism Watch" without making it the main focus of the blog. And what better way to kick things off than with the first installment of this feature?

First, a note on what vulgar libertarianism is. The term, coined as far as I know by yours truly, alludes both to the "vulgar Marxism" of twentieth century Marxoids, and to what Marx called the "vulgar political economy" of the generation after Ricardo and Mill. The defining feature of vulgar political economy, as Marx described it, was that it had ceased to be an attempt at the scientific explication of the laws of economics, and had become a hired prize-fighter on behalf of plutocratic interests. Classical political economy was a revolutionary creed that threatened the interests of the landed oligarchy and the mercantilists. And it was amenable to even more revolutionary uses, as evidenced by the Ricardian socialists. The most famous socialist treatment of Ricardo, of course, is that of Marx. But the socialist development of classical political economy also included free marketers like Thomas Hodgskin (the most preeminent of Ricardian socialists), the mutualist and individualist anarchists from Warren to Tucker and Spooner, and many Georgists. My own work falls within this latter array of petty bourgeois deviationationists. But with the triumph of the industrial owning classes in 1830s Britain, the focus of political economy shifted from scientific investigation and a radical challenge to the power of the Old Regime, to an apology for the status quo.

I described vulgar libertarianism as an ideology in the opening section of Chapter Four of my Studies in Mutualist Political Economy. Since that passage is as coherent a description as I am likely to write, rather than reinvent the wheel I'll just take the lazy man's way out and paste in the relevant paragraphs:

This school of libertarianism has inscribed on its banner the reactionary watchword: "Them pore ole bosses need all the help they can get." For every imaginable policy issue, the good guys and bad guys can be predicted with ease, by simply inverting the slogan of Animal Farm: "Two legs good, four legs baaaad." In every case, the good guys, the sacrificial victims of the Progressive State, are the rich and powerful. The bad guys are the consumer and the worker, acting to enrich themselves from the public treasury. As one of the most egregious examples of this tendency, consider Ayn Rand's characterization of big business as an "oppressed minority," and of the Military-Industrial Complex as a "myth or worse."

The ideal "free market" society of such people, it seems, is simply actually existing capitalism, minus the regulatory and welfare state: a hyper-thyroidal version of nineteenth century robber baron capitalism, perhaps; or better yet, a society "reformed" by the likes of Pinochet, the Dionysius to whom Milton Friedman and the Chicago Boys played Aristotle.

Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate article arguing that the rich can’t get rich at the expense of the poor, because "that’s not how the free market works"--implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of "free market principles."

So, without further ado, we proceed to dissect the first specimen of libertarianus vulgaris. It would have been too much of a coincidence for me to stumble across such an egregious example by chance at the same time I was planning to kick off my blog. In fact, what happened was just the opposite: I stumbled across this article and decided that it was too good a target to pass up. If I can't get into gear and start blogging when something this good falls into my lap, I might as well just give up.

In "That Taco Bell Brouhaha," Art Carden addresses the boycott (by the Wobblies, various student anti-sweatshop coalitions, and others) of Taco Bell on behalf of the Immolakee Indians who pick its tomatoes. In response to charges that Taco Bell's wages are exploitative, Carden responds:

This is precisely wrong. Taco Bell's wage policy alleviates the "continued misery of farmworkers and their families" rather than contributing to it. Wages are not foisted upon workers; they agree to pick tomatoes for "sub-poverty wages" for a reason. In a market economy, they do so because the 'sub-poverty wages" paid by Taco Bell suppliers are a better deal than anyone else is offering. It's the same reason people line up for "sweatshop" jobs in developing countries. Far from contributing to "continued misery," Taco Bell is making workers' lives a little bit better by offering something better than their next-best option.

Before we rush to condemn free markets and market forces, we have to ask where the workers are coming from. In many cases, Taco Bell suppliers employ migrant workers who are making their own "run for the border." Migrant workers in Immokalee come from places like Haiti, Mexico, and Central America—areas where markets have been crippled by state intervention for generations. The end result is a veritable army of workers who have not been allowed to build a skill set through free market employment and who are now suited to do nothing better than pick tomatoes for pennies. Far from being the enemies of labor, American markets are offering migrant workers an opportunity to substantially improve their standards of living and the prospects of their children.

There are so many features of vulgar libertarianism here, it's hard to decide where to begin. The defense of the behavior of big business under "actually existing capitalism" in terms of "how the free market works" is, as I already pointed out in the passage above from Mutualist Political Economy, an immediate tipoff that we've encountered a vulgar libertarian.

It's quite jarring, though, to encounter such writing at the website of an institution so closely associated with the memory of Murray Rothbard. A central theme of Rothbard's work, and that of left-Rothbardians like Joseph Stromberg, has been the essentially statist (and exploitative) nature of corporate capitalism in its existing form. As Rothbard put it in "The Student Revolution" (The Libertarian, May 1, 1969), "our corporate state uses the coercive taxing power either to accumulate corporate capital or to lower corporate costs." So to pass from reading an excellent piece of free market analysis like this or this, to reading an apology for the status quo like the piece under consideration here, is positively obscene.

Especially typical of the vulgar libertarian style is the argument that Taco Bell offers a "better deal" than the "next-best option." This argument can be found, phrased in slightly different words, in pseudo-"free market" boilerplate in just about any issue of The Freeman: Ideas on Liberty or any daily installment of the Adam Smith Institute blog. Here are several almost identical examples culled from The Freeman:

But are the “low-wage, non-union” Ecuadorian laborers better off working now for some foreign corporation? Apparently they think so, or else they would have stayed with what they were doing previously. (Would you leave your job for one with less pay and worse conditions?) [Barry Loberfeld. "A Race to the Bottom" (July 2001)]

People line up in China and Indonesia and Malaysia when American multinationals open a factory. And that is because even though the wages are low by American standards, the jobs created by those American firms are often some of the best jobs in those economies. [Russell Roberts. "The Pursuit of Happiness: Does Trade Exploit the Poorest of the Poor?" (September 2001)]

What the Industrial Revolution made possible, then, was for these people, who had nothing else to offer to the market, to be able to sell their labor to capitalists in exchange for wages. That is why they were able to survive at all.... As Mises argues, the very fact that people took factory jobs in the first place indicates that these jobs, however distasteful to us, represented the best opportunity they had. [Thomas E. Woods, Jr. "A Myth Shattered: Mises, Hayek, and the Industrial Revolution" (November 2001)]

In nineteenth-century America, anti-sweatshop activism was focused on domestic manufacturing facilities that employed poor immigrant men, women, and children. Although conditions were horrendous, they provided a means for many of the country's least-skilled people to earn livings. Typically, those who worked there did so because it was their best opportunity, given the choices available....

It is true that the wages earned by workers in developing nations are outrageously low compared to American wages, and their working conditions go counter to sensibilities in the rich, industrialized West. However, I have seen how the foreign-based opportunities are normally better than the local alternatives in case after case, from Central America to Southeast Asia. [Stephan Spath, "The Virtues of Sweatshops" (March 2002)]

More recently, the argument was reincarnated by Radley Balko, who referred to Third World sweatshops as "the best of a series of bad employment options available" to laborers there. Within a couple of days, this piece was recirculated over the "free market" [sic] blogosphere, along with numerous comments that "sweatshops are far superior to third-world workers' next best options...," or to similar effect (the last phrase comes from another article by Carden posted on the Mises blog last May, by the way). For more examples of the same argument, just Google "sweatshops"+"next-best alternative".

But the grand-daddy of this argument was Ludwig von Mises, writing in Human Action:

The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. [Regnery Third Revised Edition, 619-20]

See, laborers just happen to be stuck with this crappy set of options--the employing classes have absolutely nothing to do with it. And the owning classes just happen to have all these means of production on their hands, and the laboring classes just happen to be propertyless proletarians who are forced to sell their labor on the owners' terms. The possibility that the employing classes might be directly implicated in state policies that reduced the available options of laborers is too ludicrous even to consider.

In the world the rest of us non-vulgar libertoids inhabit, of course, things are a little less rosy. There was a great deal of continuity between the Whig landed aristocracy that carried out the enclosures and other abrogations of traditional rights to the land, and the employing classes of early industrial Britain. The early industrialists of Manchester, far from being (as Mises portrayed them) an upstart class who accumulated capital through their own parsimony, were junior partners of the landed oligarchy; the latter were a major source of investment capital. And the factory owners benefited, in addition, from near-totalitarian social controls on the movement and free association of labor; this legal regime included the Combination Acts, the Riot Act, and the law of Settlements (the latter amounting to an internal passport system).

In addition, the general legal framework (as Benjamin Tucker described it) restricted labor's access to its own capital through such forms of self-organization as mutual banks. As a result of this "money monopoly," workers were forced to sell their labor in a buyer's market on terms set by the owning classes, and thus pay tribute (in the form of a wage less than their labor-product) for access to the means of production.

Lysander Spooner, a hero to many anarcho-capitalists, in Natural Law described the process in somewhat less than capitalistic language:

In process of time, the robber, or slaveholding, class---who had seized all the lands, and held all the means of creating wealth---began to discover that the easiest mode of managing their slaves, and making them profitable, was not for each slaveholder to hold his specified number of slaves, as he had done before, and as he would hold so many cattle, but to give them so much liberty as would throw upon themselves (the slaves) the responsibility of their own subsistence, and yet compel them to sell their labor to the land-holding class---their former owners---for just what the latter might choose to give them. Of course, these liberated slaves, as some have erroneously called them, having no lands, or other property, and no means of obtaining an independent subsistence, had no alternative---to save themselves from starvation---but to sell their labor to the landholders, in exchange only for the coarsest necessaries of life; not always for so much even as that.

These liberated slaves, as they were called, were now scarcely less slaves than they were before. Their means of subsistence were perhaps even more precarious than when each had his own owner, who had an interest to preserve his life. They were liable, at the caprice or interest of the landholders, to be thrown out of home, employment, and the opportunity of even earning a subsistence by their labor. They were, therefore, in large numbers, driven to the necessity of begging, stealing, or starving; and became, of course, dangerous to the property and quiet of their late masters.

The consequence was, that these late owners found it necessary, for their own safety and the safety of their property, to organize themselves more perfectly as a government and make laws for keeping these dangerous people in subjection; that is, laws fixing the prices at which they should be compelled to labor, and also prescribing fearful punishments, even death itself, for such thefts and tresspasses as they were driven to commit, as their only means of saving themselves from starvation.

24 Comments:

Anonymous said...

Kevin--

You make very good points. I just don't see much of a conclusion or the dichotomy between pointing out the injustice of the capitalist system (as you do) and about half of the "vulgar libertarian" rhetoric you cite. You do a good job in pointing out the injustice in the situation. You don't do a very good job demonstrating that the current situation minus the sweatshops is better that the current situation with them.

Even though the sweatshops are a product of an unjust system, that does not disprove the fact that taking away the sweatshops and the factories that go with them will improve the situation or make it more just. It would seem that that there are three alternatives (actually there are many, but these seem to be the relevant ones): land reform, no land reform but keep sweatshops, no land reform and no sweatshops--or factories or continued economic development for that matter. The second still seems preferable to the third.

If justice requires getting rid of sweatshops, it also requires leaving people employed by them worse off. Now there may be exploitation involved. However, if we can't change the land situation in these countries, it seems hardly necessary to choke their development.

Also, the more sweatshops, the more economic development. The more economic development then the more likely these nations will not remain dictatorships. The arguments for allowing sweatshops seem to me to be somewhat like the arguments for ending trade sanctions against countries like Cuba, Vietnam, Iran, and the former trade sanctions against Iraq and Afghanistan.

Thanks for commenting. The alternative to sweatshops, IMO, is leaving land in the hands of a majority of people, eliminating patents as a barrier to indigenous control of modern production technology, and encouraging the native population to mobilize their own investment capital through mutual banks. Hernando de Soto has shown the amount of collateral for such investment in the form of small, distributive property.

And in a society where most people were small peasant properietors or self-employed artisans, local communities might well prefer to adopt the kind of decentralized, human scale technologies described by E.F. Schumacher.

So sweatshops are not the only alternative to nothing at all. They depend, rather, on coercively closing off alternatives.

The alternative to sweatshops may well be "leaving land in the hands of a majority of people", but is boycotting Taco Bell going to achieve that end? I have my doubts.

That having been said, ripping "encouraging 'socially conscious' shopping" and "seeking to use the coercive power of the state to achieve their goals" in the same breath is quite a conflation of radically different behaviors for a supposedly libertarian website like Mises.

Mike makes the salient point: "that still does not mean that taking them away would make the situation better." Third-world sweatshops might not be the 'natural' result of a free market, but within the constraints of the society those workers live in, they may well be the least bad option available. Simply banning them would be as destructive as trying to help exploited prostitutes by banning prostitution, or trying to help exploited illegal aliens by deporting them.

I agree that taking sweatshops away without preparation and without any other changes would probably cause dislocations and leave sweatshop workers worse off.

I don't want to "ban" anything. Just end all the existing subsidies and special privileges government provides to sweatshops, and force them to compete for labor in a free market. Such a free market would include, among other things,

1) a land reform that left a much larger portion of the laboring classes in direct possession of alternative means of subsistence so that they had more bargaining power in the labor market;

2) a radical scale-back of international property law that ceased to lock Third World countries into the role of providing sweatshop labor to Western-owned countries; and

3) and end to transportation subsidies, which would force big business to internalize all its own long-distance shipping costs and result in a world where everybody (in the West and the TW both) buys stuff made close to home.

Glad to see that you have your own blog now. I've always enjoyed reading you comments on Hit and Run and various other places around the libertarian blogosphere. Your commentary is always interesting and often has me reconsidering my own entrenched beliefs.

Thanks for starting this blog! I got involved in politics in 2004 and started out as a liberal, but have become totally disgusted with how much control the government has and all of our military adventures. I didn't think there were any options because Republicans digust the hell outta me and libertarian to me meant "anything for a profit with no regard for the environment or justice". It's great to discover all of these new ideas (well, new to me). I came here from Orcinus, by the way. Your comments there were always the most interesting. -Erin

This is interesting stuff.I am what you might call a non-aligned socialist who has recently become aquainted with a number of thoughtful anarchists and so have been exploring this theory and practice more extensively.On the one hand it is heartening to learn of the existence of more people seeking radical change, on the other hand,it seems that everywhere I turn I find more sectarian splintering.Collectivist,mutualist, individualist,syndicalist, libertarian,anarchists, and then all the factions on the socialist and communist side of the equation.I begin to wonder if all this dispersed energy isn't counterproductive to our common expressed values and goals such as self-determination, justice and liberty.We seem to recognize a common oppressor but then fragment on issues of theory and strategy. I can see you are very busy but I am attempting to create a process where some synthesis might be possible so that theory can turn to praxis.To that end there is a discussion at my blog on where we might find enough common ground to produce the consensus needed to energize our struggle in the here and now.Id' love your comments.

This brings me to my critique of your programme which is the tired but true: What is to be done? The solutions you propose are antithetical to the maintenence of the priveledge the ruling class now enjoys and while they demonstrate a willingness to accept reform as a form of that "maintenence" they will not initiate structural change simply at the behest of a much less powerful class.You document the degree to which they rationalize injustice.I would also like to hear an explanation of how the crises caused by over-accumulation are averted in a libertarian designed market. If you agree labor power is exchanged for use-value, expressed as a commodity, how is profit justified? Out of whose pocket does that use-value come and if there is no profit , how is a fair rate of exchange established? Hour for hour?, What keeps full employment in a labor market where surplus is necessary to keep wages low? If there is not full employment, what ethical consideration is used to decide who works? What happens to those who don't?

I'm glad to see a burgeoning left-libertarian world online. My background is in Randian libertarianism, but I always saw in Rand a sense of the total libertation of the human personality whose implication seemed broader then libertarianism- not primarily a defense of the grandeur of the American order.

After getting out into the real world and finding that capitalism and patriarchy were among the worst forces crushing romantic individualism, I rather went through a period of confusion until I encountered other left-libertarian writers like Roderick Long and Arthur Silber. Reading hard-edged writing like yours drawing clear lines for a left-libertarian future brings a smile to my face.

So thank you. I do have one correction tho': wasn't it *Plato* who tried to act as tutor to the tyrant Dionysius II of Syracuse, while Aristotle tried to educate Alexander the Great? Sorry, this kind of thing rankles to me.

Lady AsterSan Francisco(who would prefer to be advising Pericles))(*)(

The "fact" that people just happened to choose factory work as the "best available alternative," and expropriation of their land in the Enclosures had nothing to do with it?

The "fact" that big business arose from superior performance in a free market?

The "fact" that big business is just a victim of the state, and does not depend on big government for its very existence?

The "fact" that a free market economy would just be the existing corporate economy without any welfare or regulations?

I believe I've demonstrated, over and over again, that all these "facts" are LIES, and I'm not too "whimpy" to CALL them lies. And the main purpose of the lies was to sugarcoat the principles of the free market to make them attractive to the plutocracy--which has resulted in a mainstream libertarian movement that tailors its agitprop to what corporate interests want to hear, and in turn is very well kept by its patrons.

There is not the capitalist and the laborer. There are only fractal levels of capitalists wherein only the null hypothesis leads to the nomenclature of a laborer. And now that we have raised the minimum wage even farther we just decimated that category almost to oblivion. You don't have a clear understanding of libertarianism and individual rights as there is nothing vulgar about pursuing what makes you happy as long as you do not violate the rights of others. It's a simple concept. You offer no alternative.

the arguments at the top of the comment form reiterating the "sweat shops are better than the alternative" are ridiculous.

the exact same argument could be made for slavery, slaves are better off as slaves than the alternatives that present themselves as freemen. its been made since the beginning of time.

when an injustice is eliminated that affords a class only basic survival and the option is an even a greater injustice, although lives are made more difficult, the problem is also made more glaring.

the NEED for change becomes self evident, rather than "they are better off than if a stick was shoved....".

the depression is a great example. roosevelts social programs although aleviating the needs of the people, also eliminated the "need" for drastic change within the system and enabled the continuation of the monopoly capital state industrial economy. without roosevelt's relief programs, great change would have occurred, hopefully positive. people may have gone on to take greater control of their own lives.

corporations are supporting the tyranny in poor countries in exchange for profit, not alleviating it. if vulgar libs don't think part of the returns on this "cheap" labor isn't going from the corp to the corrupt fascist elites of the host country, they are dreaming. that is how the system works and we all would be better off without it.

I'm very intrigued by liberaltarinism. I tend to be conservative but I've felt that unregulated corporations will become corrupt and need government to regulate them but that government will tend to be corrupt and need intelligent voters (which are unfortunately in short supply) to regulate it.

I find it interesting to read your point that free markets in labor are not necessarily fair if the distribution of capital (land) creates a preoccuring injustice. I've heard this before but you put it into a way that makes clear sense and puts it into proper perspective.

However I am not sure what should be done about it. Consider the situation in the US. At one time anyone could come here and get a big plot of land on which they could subsist for practically nothing. That time is long past and we now have conditions where the poor have no choice but to sell their labor for a pittance but it has nothing to do with enclosure. How is the government at fault? Is this an injustice?

People fleeing the results of enclosure and other economic injustices from all over the world came to the US and continue to come here to take pittance wages because it was/is the best deal going.

What do you propose should be done in the US to create a society with equal economic opportunity for all?

In regards to the Taco Bell boycotting and similar actions: such pushes by the Immokallee Tomato Pickers Association have lead to an additional penny paid per pound picked (how's that for alliteration) for florida agricultural workers. This doesn't seem like much, until one discovers that this is the difference between 40-50 dollars per day and 70-80 dollars per day. Similar consumer pressure on Nike in the nineties caused them to change the compensation and conditions of their overseas factories, leading to enough improvements to net them a B+ from a liberal consumer guide on social benefits (I forget the specific guide; it was a friends). Now, I think that is is hard to argue that people would be better off if these sweatshops were magically annihilated; not only do people not get paid if they can't get a job (such as the ones provided in sweatshops), but they cannot lobby for better labor rights if they are unemployed. Rather than decry the existence of these sweatshops, or tacitly accept them as the next best alternative, we need to act to turn that next best alternative into a much better alternative. Before the labor movement in the U.S, all factories were sweatshops. Workers and consumers did not seek to shut them down, and eventually were able to do the same jobs, but with forty hour work weeks, pensions, &c.

Having also read Hernando De Soto's book on how property rights need to be formalized in developing countries...it seems strange that you seem to paint the two concepts (property rights / capitalism) as mutually exclusive.

You clarify your position a bit more in comments but the disparity is quite stark in your post.

The reality though is that the profit motive of industries seeking cheap labor has unintentionally done more to help developing countries develop than all the intentional development efforts of government (USAID, IMF) combined...The Dialectic of Unintended Consequences.

Hm, and you are the same Kevin Carson as the author of http://mutualist.org/id10.html ? The one who has cited "In each case of course some worthy purpose is supposed to be served--to protect consumers, to conserve natural resources, to save the family-size farm--but only the naive believe that these fine sounding aims have any more to do with the case than the flowers that bloom in the spring...."? And now you start to save the poor Immolakee Indians from evil Taco Bell?

There are two parts of capitalism - a lot of state regulation in favour of big firms, and some small parts left to markets. Capitalists want even more regulation, want to get rid of these remaining freedom of markets, get rid of competition. Once a fight starts over these things, I support, as a market anarchist, the few remaining parts of market economy: Even if its only a little bit more market freedom, far away from a free market, it is better than state regulation of this part too.

Yes, this may be defending only the status quo - but only against an attack from the statist side, against even more state. Such is life - even the poor remnants of a free market are under attack today by state capitalism.

Sorry, but the same arguments which support free markets in general support also these remnants in comparison with even more state control. And they are, therefore, correct.